Q&A: 3rd+ Year Associate - L/S Hedge Fund

As over the years, I have received a lot of help from many of you here (interview preparation, modeling training, etc.), I felt it was time to give something back. So, feel free to ask me anything! Brief background: BSc in Economics from a non-target UK university with 1st class. Started my career in Wealth Management investing in other funds on behalf of HNWIs. Quickly worked my way up and ended up running the Investment team. Then, I did an MSc in Finance from a top European Business School which landed me my current job at an L/S Hedge Fund. Having been on both sides of the fence, I'm open to questions of any nature, from investing and front office to the operations and infrastructure of a fund. Have also reviewed hundreds of resumes (in both roles) so any questions related to recruiting are welcome as well.

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Comments (30)

 
Feb 13, 2021 - 8:11am

1) The Intelligent Investor, The Black Swan (by Nicholas Taleb) and Thinking Fast and Slow (by Daniel Kahneman). I really think that when it comes to investing in public markets, people should have a basic understanding of behavioural finance and of the psychology behind decision-making. Regarding technical skills, the training provided by WSO has been super super helpful for myself (have previously done a few of the training modules to sharpen my skills). If that's not your thing, the book "Investment Banking" by Joshua Rosenbaum is pretty good, particularly for people that don't have a major in Finance etc.

2) I started networking as soon as I was accepted for my MSc. I can't highlight enough the importance of networking. But for me, it wasn't about getting a job but getting to know more about the industry etc. So, I didn't approach people asking for potential vacancies or roles coming up. Instead, I connected with them via LinkedIn (looked for uni alumni) and asked for a quick call to talk about different career paths, exit options etc. In that way, I found it easier to put myself forward and get to speak to many more people than I would have if I was asking straight away for a job. It's much easier for someone to answer "no" to the question "do you have any roles in your company, can we have a chat?" than when they are asked "I'd like to learn more about your role in xyz company as I'm currently an MSc student etc." With the latter, you get the chance to meet them and who knows when some role comes up, they might remember you and reach out.

 
Most Helpful
Feb 13, 2021 - 8:19am

I'd say it is very difficult. The majority of the big names out there require that a candidate has at least 2 years IB (M&A) experience or some form of transaction experience. My tip would be to try and target smaller funds that want to teach people themselves. From my experience, I have found that lots of smaller/ boutique funds are looking for people that are versatile and can occasionally perform various roles than just valuations for example. This means that even if you don't have direct transaction experience but know about financial modelling and public markets can get you through the front door. Also, it helps to have some form of personal portfolio of investments, even if that is with a demo account. When I interview people, I want to know whether they are truly passionate about investing and having a track record of investing (or monitoring) stocks that you can help a lot. It also helps to identify those candidates that literally study about a stock the night before the interview!

 
Feb 14, 2021 - 6:32am

You should target placement weeks or summer internships. You have the knowledge but you need to "brand" it. So, if you can't wait to have the brand of a top uni under your belt then it might be a good idea to try and get some practical work experience first. In your age, you should reach out to funds and offer a week or so of shadowing analysts etc. If you target banks, look into their Spring weeks (if you are in UK/Europe). They are week-long programms during Easter holidays that offer an insight into work and life in the banks. From there, people can get an offer for an internship etc. Of course, this is normally targeted to students already in uni but I have seen cases where people did tht before uni so it is worth a try

 
  • Analyst 1 in IB-M&A
Feb 13, 2021 - 1:22pm

From your personal experience, how common is IB > MF PE > L/S HF vs straight from IB in London / Europe? Does the 2 year stint in PE really open up more doors or gives you a distinct advantage?

 
Feb 13, 2021 - 8:14pm

I am very inexperienced, but just anecdotally I have heard that PE to HF is not as common in London as in US. Think people just stick in IB for 3 to 4 years in London before jumping. Again this is just what I have head. 

Thanks

 
Feb 14, 2021 - 6:38am

I have seen it happening a few times, IB->PE and then HF. I don't think 2 years in PE opens up more doors for HFs. The reason is that HFs want either S&T experience or transaction experience (if it is a L/S shop). 2 years or more in IB should have given you enough transaction experience in order to jump to a HF without PE.

Also, friends of mine who jumped from PE to HF really struggled initially. HFs tend to be much more volatile than PE funds (on a day-to-day basis) and lots of PE guys struggled to adapt initially.

 
Feb 13, 2021 - 2:56pm

1. How long did you wait until doing a Master's program and how did you use it to get an offer? I'm in PWM as well right now with no internships and I'm looking to break in, considering doing an MBA to land an internship.

2. What would make you consider someone for an interview that doesn't go through the more common internship -> IB -> HF path?

 
Feb 16, 2021 - 3:22am

1. About three years. I participated a lot in the uni's societies that organised breakfast events and panel discussions with the big players in the market. That gave me a good understanding of the HF industry. Then, I used A LOT the uni's career services department. From mock interview preparation to potential vacancies that were posted online.

2. I think transferable skills are as important as technical skills. I believe that for junior roles modelling and valuations are important but can be taught when someone joins a fund (provided that she/he has at least a solid foundation and some course/certification). I personally look for skills such as communication, attention to detail and passion for due diligence. You need to be able to communicate with the PM, brokers and companies you look at but also you need to be able to be on your desk for hours looking into statements, composing reports etc. So, if through your experience in PWM you could show how the skills acquired there could be useful for a HF then that would be good.

 
Feb 13, 2021 - 8:12pm

My interest lies in public markets so I am trying to gear my career towards equity research (doing ACA at big 4, and doing CFA level 1). However in the UK it seems to be shrinking (MiFid 2 or whatever it's,called), and people have advised me to go down the tech route instead.

I feel like I am more interested in traditional equity research, but is it a better bet to go down the tech route, from a practical career standpoint? 

Thanks

 
Feb 16, 2021 - 3:37am

ACA is useful as it shows a solid accounting background which is needed for equity research (the ability to understand financial statements). I've passed CFA L1 as well and I actually found it useful in the sense that it had some practical knowledge (that was before I joined my fund).

I get that equity research has been shrinking and yes it will become more competitive as there will be fewer roles but I think (at least from my experience in my fund) that a human's involvement is always required when it comes to equity research. Especially, at times like during the pandemic, I believe that for many funds that did really well (mine included), it was the  human factor in the decision making that made all the difference.

 
Feb 14, 2021 - 1:37am

I plan to get an mba in 🇬🇧. Have an engineering background and no finance experience. Planning to gather a couple of certifications (CFI and WSP) but apart from that nothing else on my resume. Is it typical in 🇬🇧 for banks to hire mba grads for ib positions? What are my chances from a non-target? Would graduating from a non-target atleast get me into a boutique/smaller investment bank? Do banks prefer students getting a masters in finance or an mba? Any target schools that you can name from where banks actively hire MBA grads for IB positions?

 
Feb 16, 2021 - 3:46am

Banks normally hire for internships from Masters or MBAs. The difference is that an intern that has an MSc will join as an analyst intern while one that has an MBA will join as an Associate intern.

If I were you, I'd look into a Masters in Finance. The UK has some fantastic unis that offer very solid programs and are direct sources of interns and analysts for banks. Imperial, LSE, Oxbridge, LBS, Warwick and then Cass are a few. In my class, there were lots of engineers with no finance experience so it is worth looking into that. So effectively, you can apply to more unis and have higher chances of being accepted at one.

Regarding MBAs, I think they still of course provide a very strong chance to intern in the big banks, but they normally last 2 years (or at least 15 months in the case of LBS) and are much more expensive. Also, from personal experience with friends (and I reiterate that is personal experience / opinion) LBS is the strongest in the UK and then you have lots of European Schools that are very good. So, if you want to study an MBA in the UK you have less options of a strong uni. An idea would be to check the latest FT rankings (were released a week ago) and check how many UK unis are in top 10-20. Then look at each uni separately and the sectors their graduates are employed in.

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